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Sunday, August 12, 2012

Another New Subsidized Hotel For Downtown, Anyone?

My enthusiasm for the Indianapolis Business Journal as an alternative to the dying Indianapolis Star is beginning to wane. The IBJ's Micky Maurer is increasingly using his publication to push ideas that are so clearly against the public good for motivations that must be questioned. In the latest edition, the IBJ editorializes against City-County Council Democrats who have held up approval on six new TIF districts, which the publication claims without substantiation will imperil "marquee projects", including the redevelopment of a block along Mass Avenue which currently houses a fire station, and new development already approved for downtown that will feature a new Marsh grocery store. The publication's claim that these projects will not occur unless new TIF districts are created is a patent lie. The council just last year approved two new large TIF districts encompassing a significant amount of assessed value on the city's northside between downtown and Broad Ripple. TIF districts now comprise more than 10% of the total assessed value of the county and generate about $100 million a year in property tax revenues that are designated for economic development purposes.

Flaherty and Collins required no TIF money for its large Cosmopolitan apartment complex across the street from its planned new apartments, and construction of its planned new development is not contingent upon public funding, unless it's going to be the responsibility of the taxpayers to build elevated pedestrian connectors to an adjacent parking garage that is being built. Nobody at the IBJ has bothered to speak to current business owners, who have successfully pioneered development along Mass Avenue over the past two decades without any handouts from the city. They are frankly miffed that the city plans to dump tens of millions into subsidizing new development in their business district, which should be able to occur without any public funding thanks to their efforts at revitalizing the business corridor. In addition, further subsidizing of housing projects downtown is exacerbating the problem of declining home values. Downtown homeowners have witnessed their property values plummet by as much as one-third since 2008. There remains a glut of unsold condos in the downtown area. The last thing we need is new housing construction that is being subsidized with taxpayer dollars.

Further troubling is a front-page story in the latest edition touting the need for another downtown hotel if the city wants to have any future hope of hosting another Super Bowl. According to a story by J.K. Wall, Indianapolis has two glaring deficiencies despite claims that our hosting of the Super Bowl this year was a huge success. Our $750 million Lucas Oil Stadium is too small for the NFL's taste he tells us. Because the chances of replacing the 4-year old stadium at a cost of $1 billion aren't too good, Wall's story suggests we should work on the other deficiency complained of by the billionaire NFL team owners. Our downtown simply doesn't have enough four- and five-star hotels to satisfy the living standards of the billionaire football team owners and their sponsors. Never mind that taxpayers provided a well-connected developer $25 million to construct the Conrad Hilton and more than $50 million to billionaire Dean White to construct his luxury JW Marriott Hotel. It still just doesn't cut it.

To his credit, Leonard Hoops, head of the Indianapolis Convention & Visitors Association, is downplaying the need for more hotel space given the fact that current downtown occupancy rates are only about 66.4%, and a number of area hotels have gone bankrupt in the past few years. The occupancy rate for the entire Indianapolis area is below 60%. "You don't build a church for Easter Sunday," Hoops told Wall. "We'd have a whole lot of pushback from within the local hotel industry to adding a whole lot of inventory right now." Because of his realistic views, Hoops is criticized in Wall's story as being "too conservative", unlike his predecessor Don Welsh, who had pushed construction of another new downtown hotel by 2015 before he bolted town for a similar job in Chicago after a short time on the job and before his efforts at expanding the city's convention business could be put to the test after a major expansion of the convention center at considerable cost to taxpayers opened up for business. Wall's story criticizes Hoops for not pushing construction of a new hotel for the sole purpose of landing another Super Bowl before the market conditions actually suggest there is a need for one. "So why not push the project ahead a couple of years if it could land the city another Super Bowl?", Wall asks.

Maurer's IBJ clearly has an agenda, and it's an agenda that seems to clash with the public's interest. I guess a wealthy banker and real estate mogul like Maurer doesn't share the concerns average people and typical business owners have about such matters, and it's really starting to show.

3 comments:

I see I posted on the wrong blog entry - sorry for that. But, while I'm here - I wonder if repayment of that $11 m is considered in this budget and part of the reason for the $60 m 'shortfall'. I still don't know why they are claiming such a large amount of shortfall. It bears close watching.

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